Abstract/Description

Speaking in Japan Commissioner Fischler argued that protecting EU...

Notes

Speaking in Japan Commissioner Fischler argued that protecting EU
farmers need not mean protecting EU markets. He argued that the
EU agricultural system could be preserved without trade barriers.
He picked up in summary form many of the key themes underpinning
the CAP mid-term review, explaining how the EU was moving from supporting
production to supporting producers, with the percentage of the EU
agricultural budget spent on market support falling from 91% in
1992 to only 28% in 2002, and with direct aid-payments to farmers
now accounting for 63% of EU agricultural expenditures.
Significantly Mr Fischler acknowledged that direct payments stimulate
the quantity produced and indicated that in the next stage of reform
the EU wanted to move to stimulating quality not quantity. This
is what lies behind proposals to expand the percentage of agricultural
financing deployed through the EU's new rural development policy
tool. Through this tool the EU rewards farmers financially for the
wider services they provide to society.
With the move to wholly de-coupled farm payments, he maintained
that the EU would 'show that it is possible to support farmers without
any effects on international trade'. He highlighted how this process
of reform was fuelling a large expansion in EU processed-food product
exports (doubling in 10 years), with a high potential for further
growth in this sector. According to Commissioner Fischler a key
element in realising this potential is ensuring food safety and
higher food quality.
Comment:
It should be noted that this vision of an EU agriculture without
trade barriers is on the basis of much lower internal EU prices,
with EU farmers being compensated for these lower prices by payments
for the provision of wider services to society. However, to the
extent that these payments to farmers for societal services mean
that EU farmers do not have to recoup their full costs of production
from the final sale price, these measures will still affect EU production
decisions and trade flows.